Kames former head of fixed income David Roberts and former head of fixed income investment strategy Philip Milburn have jumped ship for Liontrust, which is launching three new funds for them in 2018. But commentators say investors should not rush to ditch the funds they have left behind.
Mr Roberts and Mr Milburn will join Liontrust in early 2018 and will head up a new Strategic Bond Fund, High Yield Bond Fund and Absolute Return Bond Fund.
They leave behind six bond funds including Kames Strategic Bond (GB0033988436) and Kames Strategic Global Bond (IE00B2496420) funds, which the pair co-managed. Kames Sterling Corporate Bond (GB0031599870) was managed by Mr Roberts and Kames High Yield Bond (GB0031425126) and Kames High Yield Global Bond (IE00B296WQ21) were managed by Mr Milburn.
Commentators said the departure of the respected managers, who have 33 years’ experience at Kames between them, would be a blow to the asset manager. But investors should not rush for the exits of their old funds due to the depth of analyst and management resource at Kames and the solid reputations of the managers replacing them.
Ryan Hughes, head of fund selection at AJ Bell, said: "The departure of both Roberts and Milburn from Kames Capital will naturally raise some questions for investors in their funds. However, Kames has a very strong team that is highly experienced and the company has focused on building the reputation of everyone in the team over the years. The names of the managers taking on their responsibilities should therefore be well known to many investors."
The fixed income team will now be led by Stephen Snowden, currently head of credit at Kames and manager of Kames Absolute Return Bond Fund (IE00B4QJCV38) as well as co-manager of two investment grade bond funds, and Adrian Hull.
Juan Valenzuela will continue to co-manage Kames Strategic Bond fund and become co-manager of the Kames Strategic Global Bond fund. He will be joined by new co-manager Alex Pelteshki, who joined the company in 2014, as co-manager on both funds. Iain Buckle will continue to co-manage the Sterling Corporate Bond fund, joined by Rory Sandilands, who joined the company last year.
David Ennett and Stephen Baines will continue to run the Kames High Yield Bond Fund, formerly managed by Mr Milburn. Mr Ennett will also continue to manage the Global High yield bond fund, joined by new co-manager Jack Holmes.
Meanwhile, Mr Snowden will continue as co-manager of the Kames Absolute Return Bond fund alongside Colin Finlayson and the Kames Investment Grade Bond (GB00B1419R57) and Kames Investment Grade Global Bond (IE00B2495X42) funds alongside Euan McNeil.
Darius McDermott said: "Losing such high-profile fund managers is a blow but it is not a critical blow. The bond team has a lot of resource, each of the funds has a co-manager and Stephen Snowden is very impressive too.
"I would have no problem holding on to any of the funds there. They are very well-resourced at Kames and these funds were never a one-man show. It is a very well-regarded fixed income team."
Liontrust has been steadily beefing up its business in recent years. The company did not run any bond funds until it acquired Alliance Trust Investments (ATI) in 2016, which handed the company 11 new sustainable funds and a sustainable fixed income team. In the past Liontrust ran a strategic bond fund under co-managers Michael Mabbutt and Felix Martin but shut those in January 2016 when the managers resigned.
Mr McDermott said: "This is a real positive upward turn for Liontrust. They are building up a fairly impressive franchise." However he said investors considering following Mr Roberts and Mr Milburn should bear in mind that in comparison to Kames, the fixed income team at Liontrust will be far smaller, with fewer analysts and a smaller resource to draw on.
Mr Hughes said investors should not abandon Kames without careful thought. "The fixed interest team will now be led by Stephen Snowdon who is a fund manager with a great long-term track record,” he said. “I expect very little change in the investment approach and while this change in manager will naturally lead investors to review their holdings, I would caution against making quick decisions given the strength of the team."